|
-- Posted Tuesday, 4 March 2003 | Digg This Article
April Gold: Close = $353.3, +$4.0
With the dollar off about 20 cents earlier in the session, and with equity markets across the board shedding points, the yellow metal found cause to move up more than $5 intraday. We're seeing the US dollar coming back to earth, and this is allowing gold bulls the breathing room they've been looking for. As the dollar weakens, the fortunes of gold bulls should continue to swell, and a shot through $400 and beyond appears in the cards. Recall that gold is denominated in US dollars, and with the dollar losing value relative to other currencies, gold is becoming cheaper to holders of those currencies. The bombing in the Philippines is another painful reminder that terrorism can rear its ugly head anytime and anyplace. There are now 250k troops gearing up to take on Saddam. Turkey may not allow the US to use their land as a launch pad for war, thereby making a war with Saddam potentially more difficult and longer. A second UN resolution may not pass, but it's largely symbolic. A clash of heads seems all but certain with Saddam, and alongside this chaotic environment, it's likely gold will remain well supported. It’s evident that terrorism will unfortunately be with us for a while, and it’s doubtful that the destruction of a few Iraqi missiles out of a stockpile of possible thousands was what the UN had in mind regarding disarming. It could be too little, too late to avert a war. The day-to-day lives of most people in the US have not been turned upside down as terrorists would like, but certainly public perception regarding traditional investments is not too favorable. In fact, Warren Buffett's annual letter to shareholders of Berkshire Hathaway was partially released, and his crystal ball projects some more troubled times for worldwide economies. With so much bad press regarding equities and traditional investments, perhaps gold will garner even more favor from investors looking for alternatives. The stock indices were lower today and the Dow appears ready to tackle the nearby low of 7600. All markets are certainly more emotional than usual right now, including equities, financials, currencies, metals and energies. With the economy and stocks floundering, with higher energy prices bound to strangle growth, where are investors to stash their wealth? As equities have plummeted gold has garnered newfound attention as evidenced by the run to the $390 area. Will gold finally become a popular financial alternative among retail speculators and investors? Crude oil came to life once again, the uptrend is firmly in place. OPEC may not have much power to do anything about these high prices, nor may they be compelled to. Supplies are tight and there is very little unused production capacity. In fact, there is a great article on this subject in this weeks Barron’s. In any case, a bullish crude environment will also likely be buoyant for gold. It’s difficult to imagine that this tense geopolitical environment could foster a bear market in gold. It’s much more likely that sentiment is inclined to provide buoyancy to gold. The trend in gold remains up, and there’s no reason why we can’t be back near $400 shortly, and beyond. By now we’re probably all a bit tired of seeing gold hover around the 350 region, but bulls might consider this a positive omen. Many times periods of consolidation in the midst of a larger uptrend will result in the market picking up steam once again. Nearby action on the chart appears sloppy but the trend for the year is up. The pullback from the $380 area seems to have been healthy for gold bulls. A close over $360 during consecutive sessions is likely to target $400. Support is the recent low near $343. Meanwhile, hang onto those gold puts as a hedge to the long futures. Be sure to watch TradeScope daily, and remember, futures and options offer flexibility as one can just as easily be short or long any market. Each contract/option = 100 ounces, a $1 move in a futures contract = $100. Contact me anytime to discuss strategies to fit your needs.
To open an account and receive trading recommendations on gold futures or options contracts (also stock indices, energies, currencies, etc.), or to use PaperTrader Online contact me at erik@altavest.com. Visit www.altavest.com to request a Free Starter Kit. Keep in mind that there is risk of loss in all trading.
May Silver: Close = $467.2, unchanged
Silver bulls maintained control during most of the session. The silver market can sometimes act on fundamentals relating to its industrial use, and other times more like an investment or speculative metal. In either case, lately it as followed gold higher, but has not rallied with the same degree of enthusiasm. Silver didn’t quite make it to the 450 area, but those of you long in the 460 area as per TradeScope should be able to lock in profits. On a close above 475 look for new highs. Each contract/option = 5,000 ounces, a 1-cent move in a futures contract = $50. Contact me anytime to discuss strategies to fit your needs.
To open an account and receive trading recommendations on silver futures or options contracts (also stock indices, energies, currencies, etc.), or to use PaperTrader Online contact me at erik@altavest.com. Visit www.altavest.com to request a Free Starter Kit. Keep in mind that there is risk of loss in all trading.
-- Posted Tuesday, 4 March 2003 | Digg This Article
Previous Articles by Altavest Worldwide Trading, Inc.
|
